Members of Parliament yesterday passed the Parliamentary Pensions (Amendment) Bill, 2014.
The Bill was passed after a prolonged debate on the possibilities of borrowing from the Parliamentary Pension Scheme.
Hon. Emmanuel Dombo, Bunyole County East emphasized the fact that Members should be allowed to borrow from their pension scheme contrary to borrowing from banks and other money lending avenues.
“Since 2011 banks and money lenders have benefitted greatly from the interest that Members pay on the loans they take. Can you imagine what would happen if this interest is paid to our Pension Scheme? Why should members be subjected to the high interest rates of these banks?” he asked.
Hon. Rose Akol and Hon. Cecilia Ogwal strongly challenged the idea of members borrowing from the Pension scheme.
Hon. Akol argued that this would be exposing the Scheme to risks of defaulting.
“This is a fundamental matter to the survival of the pension industry. It is not practical for the Scheme to be allowed to lend, we shall be exposing this scheme to risks, like non-payment, and fellow members being taken to court for defaulting. This is our money that should be able to protect us in old age,” Hon. Akol stressed.
“In my time as a board member on the Uganda Development Bank and with consultations from experienced people in the area of pensions and microfinance, I strongly advise against us taking the direction of borrowing from our own savings,” Hon. Ogwal added.
Hon. Dombo, retaliated to this saying, “We can introduce a certain percentage like 2% insurance security for those members who are borrowing from the Scheme. In case one defaults then the insurance can cover the loan,” he said.
The Deputy Attorney General, Hon. Mwesigwa Rukutana, disregarded Hon. Dombo’s proposal citing that is unheard of.
“Hon. Members I would like to point out that the provision of not borrowing from a pension scheme is not only pertinent to the Parliament and Uganda but the world over so this would be ideally unique for us to take that approach,” Hon. Rukutana argued.
The Bill intends to amend the Parliamentary Pensions Act, 2007 to provide for among others; additional voluntary contributions, payment of trivial pensions; additional powers to the board of trustees; and related matters.
The Pensions Bill was approved with amendments.